On August 9, 2019 Intec Pharma Ltd. (NASDAQ: NTEC) ("Intec" or "the Company") reported financial results for the three and six months ended June 30, 2019 (Press release, Intech Pharmaceuticals, AUG 9, 2019, View Source [SID1234538571]).
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Highlights of the second quarter 2019 and recent weeks include:
Completed the qualification studies for the commercial scale manufacture of Accordion Pill-Carbidopa/Levodopa (AP-CD/LD) with LTS LohmanTherapie-Systeme;
Announced topline results from the Company’s pivotal Phase 3 trial (the ACCORDANCE trial) evaluating the safety and efficacy of the AP-CD/LD compared with immediate release CD/LD (IR-CD/LD; Sinemet) as a treatment for the symptoms of advanced Parkinson’s disease (PD), reporting that AP-CD/LD provided treatment for Parkinson’s disease symptoms but did not demonstrate statistically superiority to IR-CD/LD in terms of reduction in OFF time from baseline under the conditions established in the protocol;
Completed the pharmacokinetic (PK) study of the custom-designed AP developed for a proprietary compound under the previously announced feasibility and option agreement with Novartis Pharmaceuticals;
Entered into an agreement with Merck to explore using the AP platform for an undisclosed development program;
Published a review highlighting the benefits of the AP oral drug delivery platform in the peer-reviewed journal, Therapeutic Delivery;
Published the results from an earlier Phase 2 clinical study of the AP-CD/LD in PD patients in the peer-reviewed journal, Parkinsonism and Related Disorders;
Presented data from the PK study of AP-CD/LD 50/500 mg TID in a poster at the XXIV World Congress on Parkinson’s Disease and Related Disorders; and
Granted European patent titled, "Delivery Device for Oral Intake of an Agent," which covers Intec’s gastro-retentive drug delivery device with perforated external film.
Management Commentary
"We were very disappointed that the ACCORDANCE study did not meet its target endpoints. In our preliminary review of the top-line data, we noted sub-sets of patients that performed particularly well, showing meaningful reduction in OFF time compared with IR-CD/LD. Based on our preliminary review, we believe we may not have been able to administer enough LD to certain patients as it was agreed with the U.S. Food and Drug Administration (FDA) that the maximum dose would be three APs per day. Given the long-term safety profile established by this trial, we believe this limitation should be removed and that this could present a method of providing additional LD to those patients who need it. We believe the on-going analyses of this study will lead to an improved understanding of what will be required in future studies to generate approvable clinical data with the AP delivery platform in PD," stated Jeffrey A. Meckler, Vice Chairman and Chief Executive Officer of Intec Pharma.
"During the second quarter, we made significant progress advancing and expanding our partner-sponsored programs. We are excited to have successfully completed the PK study for our custom-designed AP for Novartis’ proprietary compound and are looking forward to advancing this program into potential partnership discussions. This partnership holds significant promise as the market opportunity for this proprietary compound is in excess of $1 billion. In addition, we entered into a research collaboration with Merck for the development of a custom-designed AP for one of Merck’s proprietary compounds and are now initiating the design and construction of this new AP for this very promising program.
"We continue to make progress refining the AP for our cannabis program and hope to advance our proprietary AP containing synthetic tetrahydrocannabinol (AP-THC), one of the primary cannabinoids contained in cannabis, into a new PK study next year. The Accordion Pill has the potential to address several major drawbacks of current methods of use and treatment with cannabis and cannabinoids, such as short duration of effect, delayed onset, variability of exposure, variable potency batch to batch, variability of the administered dose and adverse events that correlate with rate of rise and peak levels. Given the known analgesic properties of cannabinoids, we remain enthusiastic about the potential for these programs and believe our AP-cannabinoids will be applicable to a variety of pain indications.
"While the ACCORDANCE results were not what we expected, we continue to believe in the potential of the AP platform. Toward that end, we plan to seek to move forward with a commercial agreement with Novartis. In addition, once we obtain the final data from our ACCORDANCE study, we plan to look for ways to advance this program forward, whether on our own or through a potential partnership. In tandem, we plan to continue to build our AP drug delivery platform with the addition of both partner-sponsored R&D programs, such as Novartis and Merck, and through internally led drug reformulation programs, such as our cannabis program in pain indications. We believe this strategy provides the best opportunities for both short- and long-term growth," concluded Mr. Meckler.
Financial Highlights for the Three and Six Months Ended June 30, 2019
Research and development expenses, net, for the three-month period ended June 30, 2019 were approximately $7.9 million, a decrease of approximately $500,000, or 6%, compared with approximately $8.4 million for the second quarter of 2018. Research and development expenses, net, for the six-month period ended June 30, 2019 amounted to approximately $16.4 million, a decrease of approximately $900,000, or 5%, compared with approximately $17.3 million in the six-month period ended June 30, 2018. The decrease in both periods was primarily due to a decrease in expenses related to our ACCORDANCE study and open label extension study, offset by an increase in expenses related to the scale up activities for the commercial-scale production capabilities for AP-CD/LD at LTS.
General and administrative expenses for the three-month period ended June 30, 2019 were approximately $2.1 million, a decrease of approximately $100,000 or 5%, compared with approximately $2.2 million in the three-month period ended June 30, 2018. General and administrative expenses for the six-month period ended June 30, 2019 amounted to approximately $4.3 million, an increase of approximately $200,000, or 5%, compared with approximately $4.1 million in the six-month period ended June 30, 2018. The increase in the six-month period was primarily related to the increase in payroll and related expenses mainly due to an increase in headcount and salary raises and insurance expenses, offset by a decrease in professional services.
Net loss for the three-month period ended June 30, 2019 was approximately $10.0 million, compared with a net loss of $11.0 million in the prior year’s second quarter. Net loss for the six-month period ended June 30, 2019 was $20.7 million compared with $21.8 million during the six-month period ended June 30, 2018.
Loss per ordinary share for the three-month period ended June 30, 2019 was $0.30 compared with a loss per ordinary share of $0.34 for the three-month period ended June 30, 2018. Loss per ordinary share for the six-month period ended June 30, 2019 was $0.62 compared with a loss per ordinary share of $0.75 for the six-month period ended June 30, 2018.
As of June 30, 2019, the Company had cash and cash equivalents and marketable securities of approximately $21.6 million compared with approximately $40.6 million at December 31, 2018.
Net cash used in operating activities during the six-month period ended June 30, 2019 was approximately $17.7 million compared with net cash used in operating activities of approximately $19.9 million during the six-month period ended June 30, 2018. This decrease resulted primarily from the decrease in the net loss for the period in the amount of $1.1 million and from changes in operating assets and liabilities items of approximately $300,000.
The Company had negative cash flow from investing activities of approximately $1.0 million during the six-month period ended June 30, 2019 compared to negative cash flow from investing activities of approximately $4.3 million during the six-month period ended June 30, 2018. This decrease resulted primarily from a decrease in purchase of property and equipment in the amount of approximately $2.5 million, an increase in proceeds from the disposal of marketable securities in the amount of approximately $576,000 and a decrease of approximately $261,000 in investment in other assets related to the establishment of the commercial scale production capabilities for AP-CD/LD at LTS.
Net cash provided by financing activities during the six-month period ended June 30, 2019 was approximately $268,000, which was provided by the proceeds from the exercise of options by employees. Net cash provided by financing activities for the six months ended June 30, 2018 was approximately $35.0 million which was mainly provided by funds received from our April 2018 public offering of ordinary shares.